Luxury Giant Shakes Up Watch World: LVMH Targets Billion-Dollar Market with Bold Designs
By April Fowell
- LVMH aims to capture the luxury watch market by establishing a new watch subsidiary and introducing pricier models.
- Global sales of high-end timepieces are expected to reach approximately $30 billion in the current year, rising to over $37 billion by 2032, driven by global affluence and the interest of younger generations in upscale mechanical watches.
- LVMH, with ten watch brands including TAG Heuer, Hublot, and Zenith, reported $11.8 billion in sales in the jewelry and watch segment in 2023, appointing Frederic Arnault as the CEO of LVMH Watches to drive innovation and expansion.
Luxury behemoth LVMH is attempting to take market share in the world of luxury watches by launching a new watch subsidiary and introducing a number of more expensive models.
Global sales of high-end timepieces are projected to reach around $30 billion in this year, as per the market research company IMARC Group. With the rise in global affluence and the growing interest of millennials and Generation Z in upscale mechanical watches, it is anticipated that they will reach over $37 billion by 2032 to pass on the savings to account holders in the form of higher rates since they are spared the overhead costs associated with operating physical branches.
The jewelry and watch segment of LVMH reported $11.8 billion in sales in 2023, a 7% rise in organic growth. In addition to fashion and jewelry labels like Louis Vuitton, Bulgari, and Dior that also produce timepieces, the luxury conglomerate now carries ten watch brands, including TAG Heuer, Hublot, and Zenith.
The business elected 29-year-old son of LVMH Chairman and CEO Bernard Arnault, Frederic Arnault, CEO of LVMH Watches, which is home to the TAG Heuer, Hublot, and Zenith brands, last month. Analysts predict that the combined sales of the three brands were close to $2 billion in 2018.
LVMH's Forward Outlook
It is anticipated that Frederic Arnault, who just introduced a plethora of hugely successful new models at TAG Heuer, would apply his emphasis on innovation, state-of-the-art materials, and imaginative designs to the broader brand group. According to analysts, LVMH may potentially keep acquiring appealing brands as they become available.
The senior executives of LVMH remarked during Watch Week in Miami that 2024 is already looking to be better than 2023, when demand was dampened by increasing interest rates and recessionary worries. Executives express particular encouragement from the American luxury consumer's tenacity.
Sales of watches are behaving like the luxury sector as a whole, with the wealthiest customers continuing to be the strongest. According to executives, rising rates and economic instability have less of an impact on the rich, which is why an increasing number of firms are targeting "super-spenders" and VIP collectors who are willing to spend on the finest products and workmanship.
According to Babin, Bulgari's high-end businesses, which currently comprise hotels, fashion, and fragrances, are becoming more and more powerful.
Women's watches are the category of luxury timepieces that LVMH is focusing on the quickest. Even though only around one-third of watches sold are for women, women's interest in high-end mechanical timepieces has increased due to increased exposure on social media and an increase in the number of models specifically made for them. Sales growth is also being driven by the growing number of rich women worldwide, both inherited and self-made.